FX Careers

General Market Analysis | 06 October 2023

Markets Drift Ahead of Non-Farms

US markets experienced a quieter day yesterday as traders looked ahead to tonight’s key non-Farm Payrolls data. All three of the major stock indices closed close to flat, the Dow dropping just 0.03% and the S&P and Nasdaq both losing 0.1% on the day. The dollar dropped again against most of the majors with some profit-taking flows seen coming into the market. US treasury yields dropped back again with the benchmark 10-year dropping to 4.7%. Gold remained under pressure and Oil again dropped down, WTI trading back to $83/b and Brent around $85/b.

Non-Farms Crucial for November Fed Meeting

Global financial markets took a bit of a breather yesterday ahead of what many are touting as the most important jobs data print of the year in the US. The Fed has made it clear that it needs to see the job market cool and inflation drop before it contemplates any rate cuts and so far this week,2 out of the 3 job data results have shown the market to be resilient. Tonight’s non-Farms has much more bearing on the November rate call and anything significantly above the expected 171k print could see recent trends resume i.e. Stocks smashed and the dollar and yields jump. The market is pricing in a 21% change of a rate hike in November and a 30% chance by December but those numbers could change dramatically later today.

All Eyes on the US Market Again Today

As usual for the first week of the month, it has been a US data-heavy focus this week and today is probably the pinnacle with such a crucial non-farm payroll ahead of us. Traders are expecting rangebound trading conditions ahead of the US session. There is little note on the event calendar in the APAC session and a couple of tier 2 data releases in the European session – although FX traders are always keen to see the Swiss foreign reserves numbers. The main event comes after the New York Open with the US employment data coming out at the same time as the Canadian numbers, but whatever the result traders are expecting to see some strong moves in the market into the weekend.